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When Julia Gillard stealthily snatched the keys to Fort Fumble from Kevin Rudd in the dead of night, June 23 2010, her action was based on the party’s belief that he had “lost his way”. Ten months later the party is now shipwrecked on Point Rock at Hard Place.

In political speak, the compass is often called a poll, although Prime Minister Julia Gillard recently commented after disastrous polling, “I don’t comment on the polls, and I don’t spend much time wondering about them.” The polls were close to one hundred per cent correct long before Fort Fumble was decimated at last month’s NSW election. Polls come and go, and so do leaders as was the case in NSW where it become a simple choice of either ditch the policies or ditch the leader.  It’s now Julia Gillard versus the carbon tax, NBN Co, East Timor solution and a budget deficit that’s getting worse, not better.

Infrastructure is without a doubt the greatest problem facing modern day Australia today. NSW firms get crumbs as workers flee – almost half of NSW businesses are having difficulty finding skilled employees as they compete with the higher pay packets being offered in the mining sector.  NSW faces a skilled worker shortage given the reconstruction work in Queensland and the ever expanding mining sectors which will drive wages to dangerous levels as the shortages multiply each month and inflation will follow as inflation on a knife – edge.

BUY PRINT

I asked Tim Mooney if (by chance) he would be flying over Westminster Abbey to get an aerial shot of today’s Royal Wedding.  Unfortunately, due to budget restrictions, we settled on The Abbey in Glebe, Sydney

New home starts in 2011 are fast tracking the weakest declines since the mid 1990’s with property prices remaining subdued and many will say this is a good thing. Although on the flip side, it means that the circular flow of income (which is the oxygen for the economy) stalls, with the lack of economic growth and confidence. Home prices declined nationally in March quarter: APM we expect the same results once the June quarter figures are announced given housing credit growth remains fragile.

This week’s inflation numbers certainly point to higher interest rates by year’s end as Australia’s consumer price index rose 1.6 per cent in the March quarter (its largest quarterly jump in almost five years). The housing group is up from the 0.6 per cent level of the December quarter, with the annual rate of increase, the lowest since the September quarter of 2007. Contributing to the annual increase of 4.8 per cent for the housing group, were substantial increases in the price of utilities – 11.7 per cent for electricity, 12.8 per cent for water and sewerage and 6.2 per cent for property rates and charges. Rents increased by 4.5 per cent for the year on a weighted average, over eight capital cities and the cost of house purchase increased 2.6 per cent.

Source: The Australian, Bill Leak

Show us the money Mr Swan: it’s time to stop squandering our future by Malcolm Turnbull :Well, one thing to be said for Swan’s latest excuse is that it makes a change from the past three years of using the global financial crisis to justify failed programs and irresponsible choices.

Of course Wayne Swan nails it, when it comes to explaining the economic machinations of our economy.  Petrol jumped 8.8 per cent, vegetables increased by 16 per cent following the Queensland and Victorian floods and Cyclone Yasi and fruit increased by 14.5 per cent.  Surprise and further surprise, almost forty (40) per cent of retail spending by Australian households now lands in the cash registers of either Coles or Woolworths, according to exclusive new research by Commonwealth Bank grocery giants in 40% grab. For example: bananas cost $2.99 a kilo prior to Cyclone Yasi and jumped to $16.00 a kilo in March.

CBA’s analysis conducted for The Sunday Telegraph shows that of the $242 billion in retail sales last year, $94.3 billion or 38.9 per cent, is taken by one of the corporate giants (Coles or Woolworths) who command $46.7bn and $47.5bn respectively.

Just can’t resist another dig at the Carbon tax battle: bureaucracy v business which is an interesting debate although it should be noted that a politician will always place his/her very own job security way  ahead of endorsing a tax that threatens the length of their careers . The Carbon tax will destroy the Gillard government as the people sit in poll position and the Government is on the way to the panel beaters. Liar, liar – hair on fire!

Thousands to be stuck in NBN ‘limbo’ which is another amazing example of incompetence as thousands of Australians (many in regional areas think of the Independents) can now expect years of worse, not better, internet services as the NBN rolls out across Australia. Well it is currently stalled and facing huge cost blow–outs NBN Co housing forecasts deemed unrealistic.  Oh dear, here we go again!

To give a better understanding of the Rudd/Gillard management style of running Australia, former Finance Minister Lindsay Tanner will release his book next week titled “SIDESHOW” Ex-minister unloads on Rudd govt.

Lindsay Tanner – on the 2010 Campaign – “The worst in living memory. Banal slogans, robotic delivery, and trivial policy announcement deployed by both major parties.”

Lindsay Tanner – on Federal politics –  “Modern politics now resembles a Hollywood blockbuster: all special effects and no plot.

Last week we covered Mosman house sales and total value sold – 2000 to 2010. This week –

MOSMAN AVERAGE HOUSE PRICES FROM 2000 TO 2010

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Source: Domain Property Data

• 2000 – Up to $5,000,000 $1,329,677. Above $5,000,000 $5,637,500
• 2001 – Up to $5,000,000 $1,548,882. Above $5,000,000 $6,561,428
• 2002 – Up to $5,000,000 $1,862,836. Above $5,000,000 $6,587,500
• 2003 – Up to $5,000,000 $2,010,859. Above $5,000,000 $6,316,000
• 2004 – Up to $5,000,000 $1,854,568. Above $5,000,000 $6,941,722
• 2005 – Up to $5,000,000 $2,017,809. Above $5,000,000 $8,741,333
• 2006 – Up to $5,000,000 $2,110,469. Above $5,000,000 $7,115,228
• 2007 – Up to $5,000,000 $2,291,431. Above $5,000,000 $7,845,348
• 2008 – Up to $5,000,000 $2,267,210. Above $5,000,000 $7,170,000
• 2009 – Up to $5,000,000 $2,276,172. Above $5,000,000 $7,226,136
• 2010 – Up to $5,000,000 $2,355,472. Above $5,000,000 $7,212,826

Now that is a pretty consistent score card in both market demographics, especially when we take into consideration, the global financial crisis (2008 – 2010). Interesting statistics to bear in mind when the 2011 Budget is explained, given that the global financial crisis was in the northern hemisphere!

Next week, we will release the Mosman March quarter house sales for 2010, as compared to 2011.

Anyone prepared to make a prediction?

Cheers ^__^

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29.04.11Robert Simeon7 Comments »

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Ask any business owner what the key to business longevity is and nine times out of ten the answer will always be – customer service. It all started just before the running of the 150^th Melbourne Cup when the Reserve Bank of Australia (RBA) announced its Statement by Glenn Stevens, Governor: Monetary Policy decision.  The punters were shocked with this rate rise shock – the fourth increase in 2010. The cash rate increase was later to be described as the RBA makes pre-emptive strike, economists say. Then as quick as Americain down the Flemington track the Commonwealth Bank adds 45bp to home loan rate effective from today, citing “overall wholesale funding costs continue to increase as cheaper funding expires and is replaced with more expensive funding”. The banking stewards (otherwise known as politicians) were quick to saddle – up although opposition Treasurer Joe Hockey was already in a somewhat awkward and lonely canter.

A graph that has figured prominently in Virtual Realty News is the Household Estimates of 2007 – 08 which is the last Australian Bureau of Statistics (ABS) measure of Australian households that rent, own with a mortgage and own without a mortgage – which I call The Big Third Theory.

• The number that rent – 2,399,900 which equates to thirty (30) per cent.
• The number that own with a mortgage – 2,835,200 which equates to thirty six (36) per cent.
• The number that own without a mortgage – 2,679,200 which equates to thirty four (34) per cent.

Based on this anecdotal data where with each and every cash rate increase the impact affects sixty six (66) per cent or 5,079,100 Australian households. Politicians need to cease being statues.

BUY PRINT

Another Tim Mooney brilliant capture that would make a great front cover for Eastern Suburbs real estate agents’ Christmas cards – nothing beats a sensational aerial shot.

Credit card debt more common than mortgage debt and we all know that the Big Gang Theory of increased funding does not apply when they are already charging consumers around twenty (20) per cent. When the Melbourne Institute revealed their June quarter 2010 results they announced that for the first time since November 2006, credit card debt is the most common form of debt among Australian households, rather than mortgage debt. The number of households with credit card debt was 36.6 per cent, while 33.9 per cent had mortgage debt. Credit card rates should be at the very same rate as home mortgage rates.

Customer service is all about meaning business not being a mean business – The Big Gang Theory.

Joe Hockey has good idea, no – one takes notice given banks showing no rates restraint, despite massive profits so out came Joe Hockey’s Nine – Point Plan when he addressed the AIG Annual National Forum in Canberra on October 25 in Canberra – “It’s time to talk banking.” Banks, rates and regulations: who’s in charge here? As Westpac chief Gail Kelly calls for calm as anger builds over bank rate rises given the banks are wary of Hockey bandwagon. The irony being that just only last week it was Hockey who was copping the bashing when he suggested that he’d re – regulate interest rates. As Dennis Shanahan wrote in The Australian – It’s Hockey’s turn to bash Swan. “In just a few moments yesterday, Joe Hockey and the Coalition went from being buffoons to heroes. And Wayne Swan went from being economically and politically superior to being populist, ineffective and trailing the opposition Treasury spokesman on banking policy.” Out from the gates then jumped Wayne Swan flags banking reforms declaring the federal government would now announce banking reforms next month prompting Hockey “The Jockey” to demand release reform plan now – the “Big Fella” was now on a roll dining out on roasted swan.

There was still plenty happening within Fort Fumble’s home economics kitchen when Phillip Coorey from the Sydney Morning Herald revealed – Out in the cold: Rudd held fake budget meetings to stop leaks not to be confused with steamed leeks. “Kevin Rudd and his senior ministers were so suspicious of Lindsay Tanner that they used to hold fake pre – budget meetings to ensure their plans did not leak. According to accounts of meetings of the now abandoned Strategic Priorities and Budget Committee, nicknamed the gang of four, some meetings with Mr Tanner would deliberately be light on detail. After the meeting concluded and the then finance minister had left, the other three members of the committee – Mr Rudd, Julia Gillard and Wayne Swan – would reconvene and discuss their budget plans in detail.”

Lindsay Tanner is writing a book and I can’t wait to read that given the revelations say very little for Kevin Rudd’s schoolyard games amid financial crisis. I can’t ever remember reading a more damaging report about an elected Australian government’s economic credibility. I must admit that I have always been a Lindsay Tanner admirer – he was smart, to the point and definitely not a populist policy proponent.  Kevin Rudd denies holding fake budget meetings … why am I not the least surprised.

In the meantime, Australia is bathing in a budget surplus (not) as Labor racks up $25.2 billion deficit in just three months shadow minister for finance and debt reduction Andrew Robb reported. The latest government financial statement reveals a staggering budget deficit of $25.2 billion for the first three months of the financial year. “The government is banking on improvements in revenue to bring the budget back to surplus, yet this statement shows no signs of the level of improvement that will be required and therefore spending must be cut.” CommSec chief economist Craig James estimates that the underlying budget deficit in the year to September was a record $63.3 billion. “The main concern is that revenues are still tending sideways rather than showing signs of repair. Meanwhile, government spending is at record highs and showing no signs of stabilising.”

Without a doubt one of the smartest economic reports that I have read is Economic reform will curb pressure on rates which lays much of the blame for increased interest rates on inept government policies. “But while rate rises are a blunt instrument, they are just about the only way the RBA can suppress demand. With a rising dollar, which will depress exports other than minerals and energy production, it is an automatic stabiliser that will slow the economy. A far better solution would be for government to have invested in infrastructure – railways and ports – to increase the efficiency of exports and to have improved productivity in southeast Australia, which is not benefiting directly from the boom. But the Howard government spent the taxes raised by energy exports on its watch on welfare payments and Kevin Rudd threw money at unproductive job programs, as Julia Gillard is still doing.”

“In the current circumstances, the price of stalling economic reform will be more painful than interest rate rises”. Hence, building approvals slide more than expected in September with a 6.6 per cent fall – in the year to September building approvals were down 11.6 per cent.

So figures confirm building weak which is understandable given the Gillard government still has more than $6 billion to be spent with her Building Education Revolution. Don’t blame the Big Gang Theory entirely as we all know they suffer on compassionate grounds. The answer should not be directed to angry customers should switch banks: Gillard rather economic reform, and we all know what happened to the Henry Tax Review.

No wonder Australians want an election – now given both forms of government continue to ignore economic reform. It is becoming increasingly obvious that economics is not a strong point for either party of choice – hence the ongoing and growing budget deficit.

When it comes to Nation Building – Fort Fumble (Gillard) has lost the plot!

Subscriber sales jumped to $986,510,220 so we are closing in on the magic $1 billion in subscriber sales.

Cheers ^__^

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5.11.10Robert Simeon6 Comments »

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It started as a two horse race then a last minute scratching but were they polls apart? A ruthless party room coup that saw The Emperor now destined for the Ministry of Where Are They Now – this was described by some as a professional hit by a broken party feeding on its own the execution of Kevin Rudd. On a sadder note we lost an interesting character here at Virtual Realty News – bugger! Gillard becomes Australia’s first female prime minister as a tearful Rudd stands aside – Operation Ranga which left The Emperor’s curriculum vitae resembling a post – it note.

Giddy Up Gillard announced the cull – a good government was losing its way and straight into a gallop, cancelled  the tax – payer funded mining advertising campaign. Ironic  that this was strongly supported by the newly anointed deputy prime minister Wayne “Left – Right” Swan. During Question Time they kept exiting Finance Minister Lindsay Tanner won’t contest seat so the “Big Four” – Rudd, Swan, Gillard and Tanner  has been reduced to the “odd couple”. The Emperor has become the first Labor prime minister to be removed from office in his first term. Giddy Up Gillard will be hoping in a short space of time, that  they become polls apart. Fort Fumble is today looking more like Fort Chaos  - all over the place with no compass in sight.  Will it sink as it takes  in water?

BUY PRINT

Another major stoush earlier in the week caught my attention and what a beauty this one is shaping up to be , with only Wayne “Left – Right” Swan left in the ring.   Watch this space.

It has been suggested over time in the media that Treasury and the Reserve Bank of Australia (RBA) don’t always see eye to eye insofar as economic policy is concerned and  here is the proof. Stephen Bartholomeusz from Business Spectator filed Warwick the wise “Reserve Bank board member and leading economist Warwick McKibbin has shown some courage in making an explosive contribution to the debate about the Rudd government’s management of the economy and the quality of the design of its proposed resource super profits tax.” He “accused the government of panicking in response to the crisis and ramming through decisions “fraught with risk”. It had over spent in its stimulus package (and, indeed, is still stimulating even as the RBA raises official interest rates to control growth) and then they come up with the RSPT to try to compensate.“

“So, the government panicked in response to the GFC, committed too much spending that couldn’t be reversed and, for   political reasons – the perceived need to claim a  fiscal surplus – for which he said there was no economic basis – it had came up with the idea of raising the profits of the resource sector. McKibbin also accused Federal Treasury of becoming an arm of political policy and Treasury officials of producing “what I consider to be fairly politically – based evidence in support of a political policy, not economic policy” and criticised Treasury secretary Ken Henry for not only failing to consult experts on economic issues but also trying to silence them.”

In only what can be described as an extraordinary outburst Henry tells economists “to put down their weapons” and get behind proposals such as the resources super profits tax. What we are seeing is simply unprecedented within Australia’s political history – guns at twenty paces. Just like the execution of The Emperor a public stoush between the RBA and Treasury will add more pressure  at Fort Chaos.

But wait,  there’s more!   Former federal Liberal treasurer Peter Costello jumped into the ring declaring If its tax reform you want, try GST as next week marks the tenth anniversary of the GST. So it was only to be expected when we  read Ken Henry should get a new career – as a pollie and  it is hard to remember a time when such differences of opinion dominated Australia’s political landscape. Rudd under fire from Labor MPs over mining tax ads the rest is history when Rudd’s golden honeymoon ends in a bitter divorce.

We will be reading about this coup for weeks as there are some who believe Labor wastes a perfectly good PM although it has been conceded that Gillard’s Labor must now change policy tack which I assume means more back – flips.

Most embarrassing for the government is that Australia’s housing stock is currently short 178,400 dwellings and this number is growing not reducing. This is certainly not helped with now the sad news: higher rates a certainty as the gap closes on fixed, variable rates which further explains why the RBA is at odds with Treasury. Perish the thought that Giddy Up and Left – Right may be forced to curb their ongoing stimulus spending.

A newly elected prime minister and deputy, the RBA and Treasury bluing over economic policy and  the inflation genie now up and away. Throw in a federal election then a back – flip with the RSPT and the budget will have an almighty big hole in it. Alan Kohler wrote today on Business Spectator Gillard must mop up Swan’s mess “Julia Gillard’s biggest and most immediate problem is her deputy, Wayne Swan, and specifically the budget he brought down six week’s ago.

“Wayne Swan must bring down a mini budget that fixes his and Ken Henry’s catastrophic mess of May 11, so the RSPT can be removed as an election issue before the Prime Minister asks “the Governor – General to call an election so that Australian people can exercise their birthright and choose their prime minister”, as she put it yesterday.”

Gillard admits that her government was losing its way, but who was the navigator ? The Governor – General should cancel any plans for a holiday in the near future.

Taking a bullet for the party just took a whole new meaning.

Cheers ^__^

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25.06.10Robert Simeon6 Comments »

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With interest, I noted that Fort Fumble (Federal Government) released its Henry Tax Review – Australia’s future tax system just hours before the Logies and just two days before Reserve Bank of Australia announced rates rise again. Here is what governor Glenn Stevens had to say Monetary Policy Decision.

Much like the decision to withdraw its disastrous and totally incompetent Home Insulation program which again, was conveniently announced just 30 minutes after Torah Bright won gold at the Vancouver Winter Olympics in the half pipe. As they say timing is everything! Tempers flare as Wayne Swan clashes with shock jock on air this was Gold. Then Rudd lied to us, say insulation installers in Parliament house protest. “In February the Prime Minister met a group of installers protesting outside Parliament House in Canberra and said he would restart the home insulation program by June 1.” Alas, “Courageous Kev” Rudd to defy Senate request to give evidence on home insulation program – snakes and ladders?

The Emperor (Kevin Rudd) is now running with just three policies Health, Henry and the Building Education Revolution (BER) as the rest have now (conveniently) been placed in his growing recycle bin. Both Health and Henry are less than one month old and the BER is copping plenty of flak audit slams Rudd’s primary school building program expect that to be binned also. These decisions are not just a case of ‘missing in action’, rather, policies with distractions which sends a clear message that our elected Federal Labor Government requires more stimulus to its own intelligece quotient. BER audit finds problem but ‘value for money’ of individual projects outside scope… surprise surprise. The Mad Monk (Tony Abbott) also marked the report BER delivers a fail mark.

Having been in receipt of the Henry Tax Review since late December 2009 (five months later) and Fort Fumble does it again – Did Kev and Wayne even read Ken’s Review? On Business Spectator Alan Kohler wrote It’s politics, not reform “It is a great document – probably the best tax review ever produced in this country. Amazingly, the government has almost ignored it. After five months of leaking and spinning since the report was handed to him. The Treasurer has picked up exactly 1.75 of its 138 recommendations, or a bit over 1 per cent.” Total: 1.75 accepted; 136.25 rejected or put off without any transparency. Why, am I not surprised? Rudd’s election rebate where the Henry Review brings higher superannuation, small business changes but no tax fit. Henry tax review dumped into the dustbin then Terry McCann’s explanation “Kevin Rudd is running scared – clammy palms, hair bristling on the back of his neck, whole body shivering: scared, scared, scared.”

Now it gets even more interesting – “rather than release flagged changes on savings tax and simplifying tax returns, the Government has saved those changes to release later in the year, most likely to use in the run – up to this year’s federal election.” Wayne Swan leaves door open to more tax hits from Henry tax review – From the mines to the banks, The Emperor’s ‘fat tax’ grab goes on.

BUY PRINT

Charlie Aitken wrote on Under the Southern Cross “Robin Rudd and his merry men; banks will be next; switch to the USA. I just believe Australian banks have a giant target painted on them and as we get closer to an Australian Federal election later this year that Robin Rudd and his merry men will announce some sort of super tax on bank profits. I am very, very suspicious that the bank sector avoided any sort of punishment in the Henry Review. Ask yourself what the biggest vote winner in Australia is? Yep, you guessed it taxing banks.” Such a move to tax would remove bonuses which in turn would decimate top – end property markets. Australia is now entering the Rudd Financial Crisis – nothing achieved when policies deceive.

On Business Spectator Alan Kohler wrote Rudd’s mask is off “Kevin Rudd has done something unforgiveable in politics, and he will not be forgiven either by his party or the electorate. He has allowed the disguise to fall.” Then “the latest effort is the Resources Super Profits Tax – a national embarrassment. Those who don’t even understand why it’s a bad tax are asking: why do we need the money? We understand the need for the community to get a fair share etc, but Australia is the best performing economy in the world, so what have you guys done with all the money that you jeopardise our most successful industry to raise more?”  And “there will now be an early election – probably July. What does Kevin Rudd stand for? He is becoming an opposition leader in government, simply opposing the other side and engaged in nothing but marketing.”

The Emperor should be cleaning up his own backyard first – Kevin Rudd’s Department of Hot Air costing taxpayers $90 million. Hi – ho, hi – ho it’s off to health he goes! Australia went into euphoric celebration mode when Julia Gillard announced: Rudd will lead Labor to election. Making unpopular decisions part of my job: Rudd obviously The Emperor has policies confused with performance. In time we get the nasties – but not just yet so have a listen to what John Stone had to say to Alan Jones on 2GB about the Henry Tax Review.

Mining tax like communist policy – Palmer on Australia’s greatest ever tax reform all 1.75 per cent. This comment on Crikey by Niall Clugston, grabbed my attention. “While the criticism of Kevin Rudd’s caution is fair, the contrast with the 1980(s) is exaggerated. The Hawke – Keating reforms were part of a global crusade of privatisation and deregulation spearheaded by the Iron Lady, Margaret Thatcher. Today there is no sweeping change of economic orthodoxy. Nor is the Pale Imitator who inhabits the Lodge likely to receive any international guidance from the incompetently honest Gordon Brown or the temporary messiah, Barack Obama.” Ouch!

Again on Business Spectator Robert Gottliebsen wrote A mammoth capital strike looms “At this stage it’s just private words to selected journalists and few decisions have been made, but Australia is on the brink of the greatest capital strike in its history and one of the largest ever seen in the world. In the vicinity of $100 billion of resource projects that were almost certain to go ahead are now headed for mothballing until the resources tax is either abandoned or severely modified. If the private words to me and other journalists are converted to action and a new mining capital strike is launched, then almost certainly Kevin Rudd will not win the next election. The economies of Queensland, WA and South Australia would be decimated.” And finally “and in the middle, we have a series of blunders led by insulation and education building and botched emissions trading scheme. Oppositions don’t win elections, governments lose them.”

Based on a capital strike trade deficit surges to more than $2bn where Australia’s trade balance remained in deficit for 11 straight months, a strike would be of catastrophic proportions.

Aussies go cold on Kevin Rudd with industry predictions that The Emperor’s resource tax will kill the golden goose prompting our miners fury at double tax burden. Coalition MPs will decide stance on mining tax next week which will be interesting given admirers suffer a Rudd awakening.

As quick as a flash first miner scraps project on tax concerns a fait accompli given logic and political reality collide. But, what about super idea, but hardly tax reform back to Business Spectator – Twiggy’s root and branch shakedown. “The sharemarket has delivered a brutal assessment of who it thinks were the winners and losers from the Henry tax review – and mining entrepreneurs are in the gun. A staggering $12 billion was wiped off the value of Australian mining shares.” Australia has moved from the global financial crisis to a Rudd financial crisis. You can trust politicians … to do exactly what’s best for them then “I’m going and now I’m back” Malcolm Turnbull wrote Memo to Sir Kevin: a brave decision, Prime Minister and where it hurts us all Super hit by resources sell – off and Rio Tinto shelves billions in projects. Common sense prevails Coalition to oppose mining profits tax.

Julia Gillard denies misleading parliament on BER cost blowout another $1.700 billion now needs to be found as it was underfunded based on the initial $12.400 billion allocation. Much of the work is yet to start – auditor rocks basis of BER stimulus boost. Obviously, a distraction as Gillard denies eyeing Rudd’s job. It just gets worse!

Property markets too have been in the spotlight this week.

Housing market will implode warns Edward Chancellor Edward is no relation to the Sydney Morning Herald property editor Jonathan Chancellor. Australia is in the midst of an unsustainable housing bubble that could burst at any time, warns the man who predicted the global credit bust of 2007. We will see busts in the First Home Buyers Grant (otherwise known as the First Home Sellers Grant) as they buy back when mortgage defaults escalate due to rising cash rates. Another rate rise, another blow for PM and economists warn that more pain is on the way – the raw nerve being rate rise to crush 90,000 families.
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Not wasting any time the big four banks match Reserve’s rate rise and the housing industry blast RBA rate rise obviously they are not observing Australia’s inflation genie. Then the obvious Rudd attacks interest rate hikes by ‘greedy’ banks –  of course he is not. Although, he is on the springboard about to attempt yet another back flip as he may capitulate to miners appropriate that he is digging Australia into an almighty hole.

The most naive commentary of the week banks safe from govt tax torch, Westpac: dumb and dumber. In just over twelve months, Kevin Rudd, Wayne Swan, Lindsay Tanner and Julia Gillard have transformed a A$19.700 billion surplus into a A$32.100 billion deficit and 2010 is an election year. The majority of policies are now languishing in their much owned, self – imposed recycle bin.

Incompetence personified – where the inheritance went down the gurgler in the blink of an eye!

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Next week, (unless Fort Fumble has another policy implosion) we will explain why the cash rate still has another 2.00 per cent of increases ahead. A clue: Fort Fumble and Fort Crumble contuinue to inflate that inflation genie. Tell us what you think on the blog – is The Emperor right with his Resources Super Profits Tax? Will he be re-elected or will he end up in his recycle bin too?

Cheers ^__^

This week’s sales Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate Click Here

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7.05.10Robert Simeon8 Comments »

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The Emperor (Kevin Rudd) was back at it again recently when he commented on Australia’s skyrocketing population and quipped “I actually believe in a big Australia. I make no apology for that.” Well, Australia actually does need apologies, because critical infrastructure advice continues to fall on the deaf ears of our elected politicians.

After all, there must be something seriously amiss when past King of Spin, “Bobby Dazzler” Carr starts penning and pontificating on population policies in the Sydney Morning Herald. “Perish the thought that we can handle a bigger population” wrote the Dazzler “Some Australians must have felt similar estrangement when they read federal Finance Minister Lindsay Tanner’s defence of Australia’s runaway immigration targets, playfully comparing our population densities with those of Bangladesh.”

Then the Carr crash (with accompanying air – bag), “That Tanner is one of the best minds in federal politics will only deepen the rift between 90 per cent of Australians and their political and business leadership over population policy, or rather the absence of any policy except “more”.” It would now appear that “Bobby Dazzler” is over the selective hearing condition that plagued him in his reign of the Premier State from 1995 – 2005. The transformation went from Premier State to State of Decay to Fort Crumble and even though it did not happen overnight, it is now a nightmare.

Maybe this vacant plot of land might make a nice residential subdivision with very little chance of flooding?

www.timmooneyphotography.com

Sydney to squeeze in 640,000 new homes by Matthew Moore – Urban Affairs Editor the Sydney Morning Herald identified “A forty per cent increase in Sydney’s population over the next 20 years means the State Government has no option but to open up scores of suburbs for new developments, according to radical proposal for Sydney to build 640,000 new dwellings.”

For this to happen, Fort Crumble would need a plan so I went in search and found that it does not look pretty, as Andrew Clennell of the Sydney Morning Herald revealed. Rees desperate to stand for something “In this respect he hopes to get something on the radar at Macquarie Street that has been lacking for the past 12 months – POLICY.”

They obviously can’t hear but thankfully they can read. “Number one on his list is transport. The transport blueprint that Rees promises to hand down sometime over the next three weeks is likely to be treated with some scepticism.” I guess he means this is like a homeless person entering Star City and requesting a seat at the High Rollers Table – after all Fort Crumble is broke. Back to Andrew “This is because of the large number of projects that Labor has promised, and then not delivered, in 14 years in power.”

Oops “Bobby Dazzler” was at the helm for ten of those years – although Fort Crumble would win a wood chopping event as they sure know how to wield that political axe.

• North West Rail link (promised in 1998 and axed)
• North West Metro (announced and axed)
• Bondi Beach rail link (promised then axed)
• Parramatta to Epping rail link (halved to Epping to Chatswood rail link)
• CBD/second Harbour crossing rail link (promised and axed)
• F6 through southern Sydney, (on again, off again)
• M5 duplication (long delayed)
• M4 East extension (long delayed)

Last month’s parliamentary pay increases and the fact that our Fort Crumble premier should be (and is) the highest “paid premier” in Australia have been vindicated. Alex Gooding had this interesting analogy on transport in the Sydney Morning Herald – Three times denied: western Sydney misses out on transport, again (great read) which really adds a poignant perspective on the political decision making processes.
Ongoing calamities when “ Paid Premier” Nathan Rees overturned an earlier decision to contribute $45.000 million for the newly anointed AFL’s western Sydney franchise to build a new home ground – again out came that axe (perish the thought of constituents contemplating the axing our “Paid Premier”)

Macquarie Equities Research – this week released this compelling graph in its Australian economics report. Sketching the outlook for housing “this note examines the recent trends in the housing sector and looks ahead to key factors to watch in 2010.” Looks like a tsunami to me.

Macquarie Equities Research – “In our view, the key factors to consider are the favourable fundamental determinants – strong population growth and constrained supply – alongside the deteriorating level of affordability. With these factors working in opposite directions, it suggests that the more extreme forecasts of a house price bubble or a price collapse will continue to prove wide of the mark.” More of this report in next week’s edition.

Back to Andrew Clennell’s report “Sydney is experiencing transport gridlock. Public transport services in the CBD are overcrowded, even though train services are inadequate and in many suburbs non-existent. In response, transport plans are announced and then re-announced. New rail lines are proposed but then abandoned and governments blame increasing costs and global financial problems.” He did forget to mention that over the last fourteen years the NSW government also collected the highest amount of taxes in Australia’s history. In real estate terms it would be “dilapidated home – run down, neglected, yet with plenty of potential”.

So let’s look at what is happening locally. I went to Wayne Swan’s Nation Building website to see what is happening in Mosman and North Sydney municipalities. Indeed Nation Building personified – bicycle paths, perimeter fencing, a shade structure, and a few water bubblers -no wonder our economy has rebounded with such exhilarating speed. All that it takes is a plan!

.

Our councils are doing it tough mentally and physically although they are making plenty out of parking fines as Vikki Campion reported in The Daily Telegraph. Where you’ll cop a parking fine. North Sydney Council collected $7,000,000 which was up 48 per cent from $4,700,000 and Mosman Council $1,700,000 up 89 per cent from $910,000. It should also be noted that Mosman Council has been aggressively investing in new parking meters so one could expect a significant revenue increase with this return on investment.

In retrospect, if our population continues to explode it would then not be unreasonable to draw a conclusion that our water supplies face significant declines too (it did happen well before the proposed population explosion). Now when you renovate or build a new home, you must provide water tanks in accordance with local Council building regulations.

So why, in any Mosman or North Sydney parks, ovals or reserves, have the respective Councils not installed water tanks? After all they have only to connect to their very own street storm water. Look at the number of parks, ovals and reserves located below street level. Balmoral Oval, Rosherville Reserve, Forsyth Park, Tunks Park, Primrose Park, Cremorne Point Reserve, Sirius Cove Reserve, Allan Border Oval, Rawson Park, Spit Reserve and Reid Park. These are but a few that are all entirely dam- dependent and coincidentally, always have their sprinklers on when it is raining.

Warragamba Dam is presently at 55 per cent capacity and declining – although the Kurnell desalination plant is soon to be completed and that will supply up to 15 per cent of Sydney’s water. Of course we can’t leave out evaporation as this coincides with policy that has also evaporated.

Then again I have never been one to water down an edition.

Cheers ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/

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27.11.09Robert Simeon1 Comment »

Compared to what I read last Friday night when I opened my daily www.crikey.com.au electronic magazine, the new economic war is all about fighting growing global unemployment. Spare a thought.

“WASHINGTON: A record 32.2 million people – one in every 10 Americans — received food stamps at the latest count, the government said on Thursday, and a reflection of the recession now in its 16th month. Food stamps, the major U.S. anti-hunger program, help poor people buy groceries. The average benefit was $112.82 per person in January. The January figure marks the third time in five months that enrolment set a record.” Source:Reuters

Two editions ago, I wrote “Living in the past and struggling with the future”. Our current recession is definitely not a case of better late than never – more a case of elected politicians who have stymied our very own economies through gross mismanagement of resources, education, health, transport, employment etc.”

Last Saturday’s edition of “The Weekend Australian Financial Review” a brilliant article was filed by Damon Kitney and Annabel Hepworth titled “The man who must stop the gravy train”.
Sydney’s northern suburbs boast some of the best beaches in the world. But try venturing across the Spit Bridge on a clear Sydney day at any time of year and half your day will probably be gone before you arrive on the sand.

It’s the same at morning and evening peak hour, when the narrow four-lane bridge separating Mosman and the northern beaches regularly resembles a parking lot.

Yet when one building industry executive inquired last year of a current minister in the Rees Labor government about the chronic lack of infrastructure through the region all the way up to Palm Beach, the reply was simple: F—k ‘em, they get nothing up there, just f—k ‘em.” the minister reportedly said. These are the bad old days of NSW Labor.”

Enter Ruddy Fantastic’s Infrastructure Australia and not before time.

So the formula applied to NSW tax payers (Stamp Duty, Land Tax, Payroll Tax and GST allocation) doesn’t discriminate yet the allocation of infrastructure spending does? This simply explains why infrastructure in NSW is in a ‘state’ of chaos.

I am a strong supporter of Ruddy Fantastic’s Infrastructure Australia and a fan of appointed chairman Rod Eddington. With state and territory governments now (collectively) in budget deficit, the power of infrastructure spending has been removed from the states and territories to the new (independent) governing power – Infrastructure Australia.

With the federal government also staring down at a budget deficit, it too will have to find a way to climb back into budget surplus. In my humble opinion, the Global Financial Crisis will prove that Australia no longer requires state and territory governments and a smart vehicle like Infrastructure Australia, spells the demise of middle government and not before time.

The corruption and waste of taxpayer revenues is well documented where more than a penny drops into the federal government’s coffers. Infrastructure Australia will in all probability be Rudd’s check (cheque) – mate for turning a budget deficit around. GST has failed miserably and taxes went up (as against the promise of coming down) – so time to bring infrastructure and taxation under the one umbrella. If it comes off (and only incompetence would stop this coming to fruition) – a brilliant political power play.

The federal government urgently needs to beef – up the Australian economy. Now the independently operated Infrastructure Australia will be adding the much needed gravy to the beef.

So let’s look at the upward movement of Mosman house prices from 2000 to 2008 a tale of position, power, glory and not necessarily a bad story. Today, you hold not fold – major banks don’t have non-performing loans on their respective radars as against previous banking mandates of past recessions. Simply put: markets recover and the Mosman property currency remains one of the strongest in Australia as I will identify in coming editions.

Here is a quick brain teaser. How many $10,000,000 plus Mosman house sales were recorded from 2000 to 2008? Have a think and I will get to the answer later on.

MOSMAN HOUSE SALES FROM 2000 – 2008 IN EXCESS OF $5,000,000

2000

• Total Sales – 4
• Total Value – $22,500,000
• Average Sale Price – $5,637,500
• Lowest Sale Price – $5,150,000
• Highest Sale Price – $5,900,000
  

  2001

• Total Sales – 12
• Total Value – $77,385,000
• Average Sale Price – $6,448,750
• Lowest Sale Price – $5,400,000
• Highest Sale Price – $15.500,000 (Mosman’s first $10,000,000+ sale)
  

  2002

• Total Sales – 9
• Total Value – $54,650,000
• Average Sale Price – $6,072,222
• Lowest Sale Price – $5,400,000
• Highest Sale Price – $9,400,000
  

  2003

• Total Sales – 19
• Total Value – $120,518,250
• Average Sale Price – $6,343,065
• Lowest Sale Price – $5,000,000
• Highest Sale Price – $11,000,000
  

  2004

• Total Sales – 16
• Total Value – $112,151,000
• Average Sale Price – $7,009,437
• Lowest Sale Price – $5,000,000
• Highest Sale Price – $11,000,000
  

  2005

• Total sales – 16
• Total Value – $137,720,000
• Average Sale Price – $8,607,500
• Lowest Sale Price – $5,100,000
• Highest Sale Price – $14,800,000
  

  2006

• Total Sales – 31
• Total Value – $231,285,000
• Average Sale Price – $7,460,806
• Lowest Sale Price – $5,000,000
• Highest Sale Price – $15,000,000
  

  2007

• Total Sales – 44
• Total Value – $349,650,000
• Average Sales Price – $7,946,590
• Lowest Sale Price – $5,050,000
• Highest Sale Price – $22,500,000 (new Mosman record)
  

  2008 – Enter Global Financial Crisis

• Total Sales – 25
• Total Value – $170,050,000
• Average Sale Price – $6,802,000
• Lowest Sale Price – $5,000,000
• Highest Sale Price – $14,700,000

  Source: Australian Property Monitors

  There have actually been 30 recorded sales in excess of $10,000,000 from 2000 – 2008. The agents I spoke with guessed between 12 and 18 sales – I will reveal more data in next week’s edition which will identify the excellent opportunities on offer in this price demographic.

  This week, The Reserve Bank of Australia (RBA) cut interest rates by 0.25 per cent which now takes the cash rate (3.00 per cent) to the lowest level in forty nine years. An anti – climax because the major banks decided to either not pass on and/or minimise reductions to borrowers. With the benefit of hindsight the RBA would acknowledge that the latest rate reduction amounts to very little.

  Makes one wonder exactly who is running our country – the banks or the federal government?

  Obviously the bank deposit guarantee and the ban on short selling financials means next to nothing to them. How would they react if they were lifted? The federal government came to the party and now the banks must dance to that tune – or else.

  Better still why are the major banks charging credit cards at 600 per cent over the present cash rate of 3.00 per cent? Credit card debt should be a government priority in a recession that forces the banks to tow the line with credit card interest rates. Such a move would assist struggling families – and identify that they (banks) are no longer a law unto themselves. Messrs Kevin Rudd, Wayne Swan and Lindsay Tanner, need to decisively act and Messrs Malcolm Turnbull and Joe Hockey need to keep them honest.

  Our blog awaits your thoughtful insights.

  Have a fantastic and safe Easter.

  Cheers with chocolate on top ^__^

  For this week’s recorded Mosman real estate, Cremorne real estate, Neutral Bay real estate and Cammeray real estate sales http://www.rwm.com.au/news/

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  9.04.09Robert Simeon3 Comments »